It took a while, but the press has settled on a narrative in its quest to put a period on the monthslong debt-ceiling saga: Joe Biden won!
“President Biden this week accomplished what America elected him to do — govern from the center and make deals that solve problems,” the Washington Post’s David Ignatius opined, citing the progressive Left’s hostility toward the debt-ceiling deal the Biden White House hashed out with Speaker Kevin McCarthy as proof for his thesis.
The New York Times also deemed the deal a “win,” and praised the president’s magnanimity. By allowing McCarthy to “claim the win,” Times analyst Peter Baker wrote, Biden secured his Republican interlocutor’s “hard right” flank, warding off a threat to the speakership even as he absorbed blows from progressives.’
Having talked and cajoled Republicans out of their monomaniacal desire to destroy the American economy in pursuit of their own parochial political advantage, Vanity Fair’s Molly Jong-Fast declared, the “often underestimated” president emerged as “the big winner” in the standoff.
“Getting lawmakers to collectively step back from the financial cliff was as big a victory as any specific provision from the debt ceiling package,” Politico marveled. “And it would serve as a blueprint for the reelection campaign to come.” The deal is “a win for Biden on many levels,” USA Today’s reporters gushed. Biden achieved “total victory” and delivered a “remarkably one-sided win on the debt limit this week,” Washington Post opinion columnist Matt Bai wrote. Biden’s achievement outstripped “my wildest expectation of what he could possibly achieve in this negotiation,” MSNBC host Lawrence O’Donnell said. And so on.
It is a struggle to square these buoyant assessments of Biden’s transactional acumen with both the terms of the deal to which he consented and the implosion of the strategy the president pursued in the seven months it took to get there.
The president’s approach to the debt-ceiling standoff came into view even before the 2022 midterm elections, when Democrats had already resigned themselves to losing control of one or both chambers of Congress. “Republicans are determined to hold the economy hostage,” Biden said at a gathering of the Democratic National Committee in October 2022. He forecast an effort by Republicans to force the White House into consenting to reforms to America’s major entitlement programs or using the threat of default as leverage.
Biden brushed off calls from both Democratic lawmakers and members of his own administration to seek a legislative abolition of the debt ceiling altogether in the lame-duck session of Congress. Instead, administration officials insisted, the debt-ceiling debate would establish a politically beneficial contrast between his White House and the GOP. As one Biden adviser confessed, “the gun is in Republicans’ hands” and “there is little question as to who will get blamed” for a default.
This bravado masked a structural problem for Democrats, however, insofar as it was clear that there was no appetite among moderate Senate Democrats for pushing through a short-term debt-ceiling hike via reconciliation. So the matter would have to wait until 2023, and the Biden White House would count on the fractious House Republican conference to self-destruct when the chips were down.
By the time the 118th Congress was sworn in, Biden settled on his offer to the party in control of the chamber from which appropriations bills must originate: nothing at all. The president would deign to discuss only budgetary issues with House Republicans, but not the debt ceiling. “There should not be conditions around this,” White House press secretary Karine Jean-Pierre insisted. “We should not be negotiating.” This strategy was endorsed by Democratic boosters in the media who convinced themselves that the GOP had rolled Barack Obama during debt-ceiling negotiations in 2011 (a conclusion with which no Republican agrees). But it was bad advice: The Biden White House refused to engage in substantive talks with Republicans well past the point at which its obstinacy became self-defeating.
“If the president doesn’t act,” Speaker McCarthy warned in late March, Republicans would force his hand. The House GOP would pass its own debt-ceiling hike on its terms, which would compel Democrats to respond. McCarthy gambled on his conference’s capacity to rally together around a deal, and the bet paid off. Still, Biden was unmoved by the debt-ceiling bill the GOP produced. He refused to budge, even as a growing number of prominent Senate and House Democrats urged him to abandon his recalcitrance and agree to negotiations.
Eventually, Biden buckled under pressure — not just from his own party but the voting public. By the end of May, poll after poll found that the public sided with the GOP’s position — that increasing the nation’s borrowing limit should be paired with spending cuts — while self-described Democrats were split on whether to endorse the Democratic Party’s pursuit of a no-strings debt-ceiling hike.
The deal to which Biden acquiesced reflects the leverage Democrats sacrificed during the months in which they committed themselves to mulishness. The American Enterprise Institute’s Michael R. Strain summarizes the details of the deal neatly:
$1.5 trillion in deficit reduction, tougher work requirements on certain safety-net programs, clawing back unspent Covid-relief money, measures to speed up environmental reviews for major projects, and no tax increases. Considering that Democrats control the Senate and the White House, this is all the more impressive.
Throughout it all, Democratic partisans toyed with ex machinas and elaborate Rube Goldberg devices purportedly designed to bypass the constitutional impediments to Joe Biden’s desired outcome. From repurposing the 14th Amendment so that it somehow authorized new debt rather than simply mandating the repayment of existing debt to just ignoring the debt ceiling altogether, Democrats considered all manner of non-options out of a desire to avoid facing the music. But in the end, Joe Biden caved.
In evaluating the fan fiction circulating this week about Biden’s supposed victory, the operative word is “fan.” These journalistic outlets are sacrificing their credibility by disregarding reality and substituting instead a preferred narrative of events in which Joe Biden emerges the hero. Indeed, the president has presided over a bipartisan achievement here, but he had to be dragged into it by House Republicans and the reality-based members of his own party.
The Biden White House is politically obligated to declare victory amid retreat, and it is best practice to retail that dubious narrative to reporters. But there’s no immutable law of the universe that compels reporters to accept the narrative at face value. That is a choice — a deeply regrettable one.
More arguable, though, are assertions by officials that spending must increase forever without regard for the ability to pay, and that debt must necessarily climb as a result. Worse is the fantasy that the debt limit can be ignored—a ridiculous idea with which the Biden administration is flirting. The federal government must learn to spend no more than it collects, or it will cause massive problems.
“This year, our budget deficit will likely be $1.4 trillion. What’s more, the deficit will reach about $2.8 trillion in 2033. And that’s assuming peace, prosperity, relatively low interest rates, no new spending, and that some provisions of the 2017 tax cuts will expire as scheduled,” the Mercatus Center’s Veronique de Rugy wrote this month in Reason. “That’s $20 trillion in new borrowing over 10 years. So far, Uncle Sam has ‘only’ accumulated $31 trillion in debt over the course of our entire history. But it gets worse fast.”
“Waiting to put fiscal policy on a sustainable course and allowing federal debt to continue to climb would have several effects on the economy,” the Congressional Budget Office cautioned last year. “The high and rising federal debt that CBO projects over the next three decades would have serious consequences for the economy and federal budget, including the crowding out of private investment, higher interest costs, and increased risks of a fiscal crisis and of other disruptions.”
Arguments among the political class over raising the debt ceiling gloss over the indisputable fact that growing federal debt is evidence of officials’ failures to make difficult choices about the limits to government largesse. And the situation is likely to worsen as damage accumulates. Anemic tax receipts (because that’s what government types care about) will become a regular feature as poorer Americans struggle to make ends meet in a hobbled economy.
These independent budget tools, despite flaws, offer important insights into what the federal government does with our money. Politicians may not be up to the job, but somebody needs to take on the tough (or not so tough) choices that have to be made to bring federal finances under control.